UK - Returns on index equity funds do not justify their risk when compared to corporate bonds, Isis Asset Management maintains.
Chief investment officer Robert Talbut says average returns on equities are expected to be 6-7% over the next few years.
But he points out that a fund with weightings in both high-yield and investment grade bonds is likely to make the same returns at less risk.
He calculated that such bond funds could be constructed to have a quarter of the risk of an index equity fund.
He explained: “Put simply, if the index isn’t going to generate significant gains over bonds then you should own less of it.
“Themes like ‘value’ and ‘growth’ investing have had their time.
“We’re now entering a period which will be looked back on as a ‘golden age’ for stock pickers where avoiding the markets laggards proved to be just as important as picking the winners.”
He added: “When equity markets are characterised by modest average returns but high levels of year-on-year volatility, they become the preserve of more aggressive investors aiming to return substantially more than the bond markets.”
Enhanced powers for The Pensions Regulator (TPR) to prosecute and fine company directors who "wilfully or recklessly" put their defined benefit (DB) pension scheme at risk will be hard to enforce, commentators say.
Melrose has pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the engineering business.
Existing master trusts will be forced to pay £41,000 when applying for authorisation under the upcoming regime, the government has confirmed.
UPDATE 2 - DWP publishes DB white paper: Stronger powers for TPR, DB chair statements to be introduced
The Pensions Regulator (TPR) will be given the power to fine company bosses who deliberately puts their defined benefit (DB) schemes at risk, the government has confirmed.